You may have read stories this week about loan servicing company Ocwen Financial Corp. The company is under fire in a lawsuit by state and federal authorities who say the company mishandled millions of mortgage accounts.
Many consumers have complained to the state about Ocwen since The News Tribune revealed one Tacoma man’s trouble with the mortgage servicer in 2012. He tried for six months to get Ocwen to accept his loan modification, faxing and mailing documents to no avail.
Ocwen found the paperwork less than 24 hours after The News Tribune sent the company a list of questions.
After that story, the state Department of Financial Institutions opened a complaint against Ocwen on the man’s behalf.
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On Thursday, state and federal authorities sued Ocwen, alleging millions of accounts the company serviced were riddled with errors. The Florida-based company disputed the allegations, saying the Consumer Financial Protection Bureau was playing politics “to grab headlines.”
A group of state mortgage regulators, Washington not among them, has blocked the company from acquiring new business.
The cease and desist order by other states should not affect Washington consumers, said Steven Sherman, chief of enforcement for the consumer services division at DFI.
“We are suggesting that consumers make their Ocwen payments as required,” he said.
Last year, Ocwen agreed to pay Washington state a $900,000 fine and agreed to stop servicing its Washington residential mortgages out of its unlicensed overseas offices in the Philippines and India.
The state Department of Financial Institutions found Ocwen had been doing so as far back as Aug. 1, 2010, and particularly between June 2013 and August 2015, according to a DFI news release last year.
In a 2012 News Tribune interview with Paul Koches, now Ocwen’s executive vice president of corporate affairs, he said the company was proud of its servicing platform.
“It is proprietary. We’ve built it ourselves over 20 to 25 years. If you do ask around in industry, government, community advocacy circles, most people will acknowledge we do lead the industry with our ability to handle large volumes with credit-challenged and distressed loans,” said Koches, who was then Ocwen’s executive vice president and general counsel.
However, the current lawsuit against Ocwen says the company seemed to be aware that its software was failing, according to the Associated Press.
According to the lawsuit, Ocwen’s head of services called the company’s technology “an absolute train wreck.”
The News Tribune’s attempts to reach someone at Ocwen this week were not successful.
Since 2012, consumers have filed around 175 complaints with DFI about Ocwen, Sherman said. Common complaints include whether the escrow account is being properly handled and suspect foreclosure activities, he said. Mortgage servicing companies don’t own the mortgage, but they are responsible for collecting payments from homeowners.
Sherman recommended that consumers with complaints about Ocwen or any other mortgage servicer go to dfi.wa.gov/consumers/ and click on File A Complaint.
The Associated Press contributed to this report.